Market-implied expectations for the number of rate-hikes in 2018 surge to new cycle highs (2.82 hikes) ahead of the minutes (and the dollar had crept higher with them).
Since The Jan 31st Fed meeting, everything is lower (gold least, stocks most)…
And The Minutes did not disappoint with regard to a hawkish tilt…
- *FED MAJORITY: STRONGER GROWTH LIFTS LIKELIHOOD OF FURTHER HIKES
- *SOME FED OFFICIALS SAW APPRECIABLE RISK INFLATION TO LAG TARGET
Definitely has the sound of a Fed with several members that are worried about being “behind the curve.”
Bloomberg highlights the key takeaways from Fed minutes lockup:
One of the money quotes: “A majority of participants noted that a stronger outlook for economic growth raised the likelihood that further gradual policy firming would be appropriate”
FOMC voters agreed to add word “further” in front of gradual increases because of the stronger economic outlook
Some doves countered back: “Some participants saw an appreciable risk that inflation would continue to fall short of the committee’s objective” and judged the FOMC “could afford to be patient”
A number of FOMC participants indicated that they had marked up their forecasts for economic growth in the near term vs their December estimates; economic impact from recent tax cuts “might be somewhat larger in the near term than previously thought”
“Participants general noted few signs of a broad-based pickup in wage growth in available data”
Several FOMC participants noted that
“Amid elevated asset valuations and an increased use of debt by nonfinancial corporations, several participants cautioned that imbalances in financial markets may begin to emerge as the economy continued to operate above potential.”
via Zero Hedge http://ift.tt/2CDLuFG Tyler Durden